NiceShoes retail store sells one model of casual shoes all around the year. The demand for this model has an approximate constant rate of 750 pairs every three months. The store incurs an ordering cost of $ 75 and a holding cost of 20%. The supplier offers NiceShoes the following price structure. Which order quantity results in the lowest cost? Quantity 1-249 250-349 350-499 ≥500 Price $40 $38 $36 $34 3.1. Which order quantity results in the lowest cost?

Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
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NiceShoes retail store sells one model of casual shoes all around the year. The demand for this model has
an approximate constant rate of 750 pairs every three months. The store incurs an ordering cost of $ 75
and a holding cost of 20%. The supplier offers NiceShoes the following price structure.
Which order quantity results in the lowest cost?
Quantity
1 - 249
250-349
350 - 499
2 500
Price
$40
$38
$36
$34
3.1. Which order quantity results in the lowest cost?
Transcribed Image Text:NiceShoes retail store sells one model of casual shoes all around the year. The demand for this model has an approximate constant rate of 750 pairs every three months. The store incurs an ordering cost of $ 75 and a holding cost of 20%. The supplier offers NiceShoes the following price structure. Which order quantity results in the lowest cost? Quantity 1 - 249 250-349 350 - 499 2 500 Price $40 $38 $36 $34 3.1. Which order quantity results in the lowest cost?
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